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CAR Newsletter - January 2021

Volume 31, Number 7
Fiscal Year 2021
January 8, 2021


Email scam for W-2 information

The IRS and state tax agencies have once again renewed their warning about email scams requesting employee Forms W-2 from company payroll or human resources departments.

Agencies are urged to double check any executive-level or unusual requests for lists of W-2 forms or Social Security numbers. Cybercriminals are tricking payroll and human resources officials by disguising emails to make it appear as if it is from an organization executive. An email is sent to an employee in the payroll or human resources departments, requesting a list of all employees and their W-2 forms. The thieves then attempt to file fraudulent tax returns for tax refunds and/or post the information for sale on the darknet. Personnel should pay close attention to the email address of the sender and confirm requests for any sensitive data verbally, using previously known telephone numbers, or in person.

As part of the Security Summit joint effort, the Don’t Take the Bait education series focuses on raising awareness of the critical need for increased computer security and caution when reviewing email inboxes – specifically email scams that identify themselves as a friend, customer or company. The series can be viewed on the IRS website.

The IRS is investigating phishing emails. If an agency receives an email of this type, immediately contact Lisa Raihl at 405-521-3258 or Jean Hayes at 405-522-6300.

Employee direct deposit verification of bank routing number

Agencies are reminded that employee bank deposit slips should not be used to get the bank routing/transit number for setting up direct deposit information. A voided check from the employee is the most reliable method. If the employee does not have a voided check or wants to deposit into another type of account, have the employee call the bank directly to get the routing/transit number. A bank routing/transit number should never start with the digit 5. This indicates a branch of the bank and will cause the direct deposit to fail. A direct deposit that fails and does not pay will require additional processing by the agency in order to pay the employee.

Updating employee bank routing numbers

Agencies may, on occasion, receive a report generated from the Office of the State Treasurer’s current ACH application. OST’s current ACH application automatically updates bank routing numbers based on the latest table of Federal Reserve Bank routing numbers. This update allows the items to continue processing for payment. When an update is made, the Participant Old/New Routing Number report is generated listing the employee, and both the incorrect and correct bank routing numbers. This report is distributed to agencies to update employee banking information. These updates must be made so transactions will continue to process without interruption. This report is sent out by OMES to the contact listed for the Updated Banking Information report.

W-2 and 1099 pick-up instructions

OMES will have W-2 and 1099 forms ready for release on Tuesday, Jan. 19, 2021, beginning at 10 a.m. through Thursday, Jan. 21, 2021, at 3 p.m. Agencies will pick up the forms from our temporary location at the OMES IS Building at 3115 N. Lincoln Blvd. You may park in front of the building in the visitor parking spots. As you enter the building, you will need to pick up the phone to check in. A team member will then bring your package to you. 

Affordable Care Act Form 1095-C distribution change

With many employees transitioning to laptops, the use of CDs for distributing state agency 1095-C forms is no longer the best method. Secure files will be sent to agencies at year end. Agencies are required to print and distribute the forms to employees. We need contact information for each agency to send these files.

If you have not already provided the contact information, please email; with the following for the agency’s primary and alternate contacts:

  • Agency number.
  • Agency name.
  • ACA contact name.
  • ACA contact phone number.
  • ACA contact email address.

Forms W-2 and W-2C terminology

The following terms are frequently used for different types of W-2s based on when the form is completed.

Original W-2: Form originally issued to an employee by Feb.1.

Reissued W-2: Original reissued to an employee when an original form is lost, misplaced, not received, etc. Write REISSUED STATEMENT and the reissued date (MM/DD/YYYY) on the employee’s new copies. A reissued W-2 can be produced at any time because the data will not change.

Corrected W-2: Used to correct the original W-2 when an error is discovered before OMES submits the file to the Social Security Administration. Write CORRECTED on the employee’s new copies along with the corrected date (MM/DD/YYYY).

Note: Must be delivered to OMES by Jan. 27, 2021. Please send the original W-2, a copy of the corrected form and a memo explaining why the correction is needed. Do not send copies of checks or other items.

W-2C: The form used to adjust the original W-2 (or corrected W-2) information when an error is discovered after OMES has submitted the file to the SSA.

Note: W-2Cs must be submitted to OMES as soon as completed and will be filed with the SSA. Please send a copy of the original W-2, Copy A of the W-2C and a memo explaining why the correction is needed. Do not send copies of checks or other items. The employee should receive a copy and the agency should keep Copy D for their records.

Form W-2 corrections

Corrected W-2 forms must be delivered to OMES by Jan. 27, 2021, for the corrections to be in the submission file. The due date for submission of Form W-2 information to the SSA is Feb. 1, 2021.

Please send the original W-2, a copy of the corrected form, and a memo explaining why the correction is needed. If the correction is due to a statutory canceled warrant that is not to be replaced, include a letter asking that the warrant not be replaced.

Note: When a warrant has been canceled by statute there is no reason for a W-2 correction unless the payment was made in error. If it was a valid payroll payment, the employee is still entitled to a replacement warrant; therefore, the W-2 reporting is proper.

Any correction needed after this date must be sent to OMES as a W-2C for us to notify the SSA. This will ensure reporting is as accurate and complete as possible.

Employee tax refunds

Employee payroll tax withholdings are not authorized to be refunded to an employee once withheld from payroll. Refunds will not be given to those employees who did not submit a W-4 in time for payroll processing.

All agencies should have a deadline for employees to submit W-4 changes. Per IRS regulations, the effective date of the new W-4 will be the beginning of the next pay cycle for the employee. The system should not be back-dated in an attempt to refund taxes to the employee; this is not authorized by the IRS.

Reporting requirements for repayments of prior year wage amounts

Repayments from employees made in the current year (2021) that are for overpayments of wages in a prior year (2020 or earlier) must be repaid at the gross overpayment amount in accordance with IRS regulations.

A Corrected W-2 or a W-2C, as applicable, must be completed and sent to OMES. Only Social Security and Medicare wages and taxes are corrected on the Corrected Form W-2 or W-2C.

Do not correct federal or state taxable wages or income taxes. The employee received and had use of the funds during the year of overpayment and as such, the amounts are taxable for federal and state purposes. The employee may be able to take into account such repayments on their current year (2021) income tax return. Please advise the employee to speak to a tax accountant.

Additional instructions for W-2 and W2-C are available on the IRS website.

For assistance, contact Jean Hayes at 405-522-6300, or or Lisa Raihl at 405-521-3258 or

Annual withholding tax exemption certification for military spouse

Agencies are reminded to review and ensure employees have a valid OTC Form OW-9-MSE, Annual Withholding Tax Exemption Certification for Military Spouses on file for 2021.

The form must be completed annually to continue the exemption for 2021. If a new exemption form has not been submitted for 2021, the employee’s withholding status must go back to the last valid Form W-4 on file. When an employee submits the Form OW-9-MSE, a completed Form OK-W-4 must also be submitted. If you receive an exempt Form OK-W-4 with Form OW-9-MSE after processing a payroll, do not process a tax refund to the employee or submit one to OMES for processing. The new exemption form will take effect on the next pay cycle; it is not retroactive to the beginning of the year.

As a reminder, a nonresident spouse of a nonresident service member may be exempt from Oklahoma income tax on income from services performed in Oklahoma. OTC Form OW-9-MSE must be completed and returned to the employer with the required documentation, along with Form OK-W-4.  The instructions contain a list of requirements the employer must meet before the withholding exemption will be allowed. The forms must be completed each year the exemption is to be claimed.

This exemption will require an update to the employees' State Tax Data in PeopleSoft. The Special Tax Status will be changed to:

Maintain Taxable Gross; SWT zero unless specified in Additional Withholding below.

This does not affect the Federal Tax Data. Federal withholding will still be calculated based on the IRS Form W-4 in effect.

Although exempt from state income tax withholding, the income is still reportable on the W-2 as Oklahoma wages. Employees with questions should contact their tax accountants.

The Oklahoma Tax Commission has additional information and a section of Frequently Asked Questions on its website.


1099 NEC and MISC forms and corrections

Forms 1099 NEC and MISC will be ready to pick up after 10 a.m. on Tuesday, Jan 19, 2021, along with the W-2s and other year-end tax forms. 

All forms will be available at OMES IS Building, 3115 N. Lincoln Blvd., Oklahoma City, OK 73105.

Please review the 1099 forms you receive and advise OMES of any changes which you deem necessary. A few blank 1099 NEC and MISC forms will be included for you to make needed corrections and you can make additional copies of the blank forms, if necessary. 

If you have several corrections, please contact Alicia Reel or Beth Brox. They can create new 1099s with your corrections and forward them to you. Submit changes to OMES prior to Jan. 27, 2021.

Please note the following procedures pursuant to such changes in the 1099 documents:

For missing addresses or address changes, send us a copy of the 1099 that includes the address you added or changed and include a notation to the type of change as well as an updated W-9.

For name or FEI/SSN changes, send us a copy of the original and the amended document as well and an updated W-9 or Vendor/Payee form so that we have appropriate documentation for the changes.

For all amount changes, please send us appropriate documentation explaining the nature of the transaction changes.

Any changes that need to be made after Jan. 27, 2021, still need to be sent to OMES as soon as possible and we will forward the information to the IRS.

In all instances, please ensure documentation includes enough information for us to understand the changes, the reasons for them and a contact person in case we have further questions.


As in recent past for 1099 reporting – To ensure security on Form 1099M, we will truncate the SSN and FEI numbers so only the last four digits are shown, e.g., xxxxx1234. If you have an inquiry on any 1099 NEC or MISC, please provide OMES with the account number found in the lower-left portion of the form.

This month, before submitting our 1099 file to the IRS, we will TIN match the file with the IRS e-Services system. Any vendors that mismatch in this process will need to be corrected before we can submit our final file to the IRS on Feb. 1, 2021.

Questions or comments should be directed to:

Alicia Reel, 405-522-9479; or
Beth Brox 405-522-1099

Tax year 2019 – IRS backup withholding notice

OMES received the Tax Year 2019 backup withholding notice from the IRS and has since sent to agencies any mismatches. This notice identifies payees with a missing taxpayer identification number (TIN) or an incorrect name/TIN combination.

Agencies must obtain correct information from the payees and resolve the discrepancies. All corrections must be reported to OMES Vendor Registration. The information will be TIN-matched to verify accuracy and to update the vendor file as needed.

Backup withholding may be required on these payees. When a payee’s information does not match the IRS records for two out of three years, the entity is required to apply backup withholding to future payments until the mismatch is corrected. For 2020 and 2021, the backup withholding rate is 24%. 

IRS Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), provides the actions an entity must take when notified of a mismatch, which includes the requirement to apply backup withholding until the correct information is provided.

Backup withholding held from miscellaneous claim payments must be submitted to OMES on the same day as the vendor payment is completed. Interagency wires for backup withholding should be payable to the State Contribution Fund (Vendor 0000000467, LOC #0001, ADDR #1).

After processing a payment for backup withholding, send details of the payment to OMES at

Once the correct information is provided, verified and entered into the system for correct reporting, the agency may stop applying backup withholding.


Federal tax payments scheduling

Please be aware of the processing time when entering the tax journal entry and scheduling the tax payment on the OST ACES system to ensure payments are entered and set to pay by the liability due date.

Tax payment information must be provided by 10 a.m. for the payment to be released that day. The effective date must be at least one day in the future.


New NACHA rules

Beginning on Jan. 1, 2021, NACHA has implemented a change to the NACHA Operating Rules. The new rule defines an egregious violation as a willful or reckless action by a Financial Institution, originator or third-party sender, involving at least 500 entries or multiple entries totaling a minimum of $500,000.

In addition to its other responsibilities and oversight functions, the ACH Rules Enforcement Panel will have the authority to determine whether a violation is egregious. 

The sanction for an egregious violation can be up to $500,000 per occurrence and a directive to the ODFI to suspend the originator or third-party sender.

Please review and update the current agency controls in place to avoid any violations.

To learn more about the new rule, please reach out to OST at

Last Modified on Aug 05, 2021